Illumina board says Roche hostile bid 'grossly inadequate'

Having thoroughly reviewed Swiss drug and diagnostics major Roche’s (ROG: SIX) hostile takeover bid, USA-based Illumina (Nasdaq: ILMN) says its board of directors has unanimously determined that the unsolicited $44.50 per share - around $5.7 billion in total - cash offer (The Pharma Letter January 25) is “grossly inadequate in multiple respects, dramatically undervalues Illumina and is contrary to the best interests of Illumina’s stockholders.”

Accordingly, the board recommends that stockholders not tender any of their shares to Roche. The company yesterday filed a Schedule 14D-9 with the Securities and Exchange Commission detailing the reasons for its rejection. Last month, Illumina adopted a shareholder-rights plan – or poison pill - with a 15% trigger in an attempt to protect itself against Roche's takeover attempt (TPL January 27).

“It is the board’s unanimous belief that Roche’s offer dramatically undervalues Illumina and fails to reflect the value of the company’s unique leadership position and future growth prospects,” said Jay Flatley, president and chief executive, explaining that “Illumina has established itself as the innovation and market leader in tools for genetic analysis, with a proven track record of profitability and outperformance, resulting in significant value creation. Our industry is nascent, with the promise and potential to experience extraordinary growth in the years ahead as genetic information becomes broadly applied beyond molecular biology research, and into medical diagnostics, reproductive health and cancer management. As the growth of this industry accelerates, Illumina is singularly positioned to expand its market leadership, and to deliver value to our stockholders that is far superior to Roche’s offer.”